For two months, US natural gas traded within a descending channel. The 2025 low was set at the start of last week, prompting a price recovery. The rebound has now reached 15%, meeting the buyers' initial target: the $3 level and the nearby 23.6% Fibonacci retracement. This move broke the upper border of the channel, which could accelerate further growth toward the 38.2% Fibonacci ($3.25).
The $3.25 threshold aligns with the 100-day moving average (EMA 100), a level that may prompt gas buyers to take profits. Only the EMA 50 (close to yesterday's session high) would act as an intermediate hurdle. However, technical indicators suggest room for further gains. The RSI has just moved above 60, and the MACD has started to rebound, though it remains in negative territory.
Fundamentally, quote hikes are in key with seasonal trends. As winter comes closer, demand for heating fuel multiplies. While US companies have largely refilled storage to levels seen in previous years, European firms are lagging behind. According to Reuters, by the end of August, EU reserve facilities were less than 80% full, compared to 92% a year ago.
This creates a steady demand for US LNG, which requires significant natural gas feedstock. In August, American companies exported a record 9.33 million tons of liquefied fuel, surpassing the previous high set in April. This export volume is further supported by the ongoing ramp-up of the Plaquemines facility, the nation's second-largest LNG plant, which operated at approximately 70% capacity last month. Increasing exports are likely to draw down domestic gas inventories, providing continued support for prices.
The following trading strategy may come into play:
Buy natural gas at the current price. Take profit: $3.25. Stop loss: $2.85.
This content is for informational purposes only and is not intended to be investing advice.
